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Water policy is an important topic on
the agenda of the international community, and efficiency
and equity in the allocation of water have emerged as
important factors to be considered. Water pricing can be
used to mitigate both the quantity and quality dimensions of
water scarcity. This paper reviews partial equilibrium
models and general equilibrium models that are relevant to
irrigation water management issues. The most widely
discussed issues in these models are water markets and water
pricing. The interrelationships between economic, cultural,
social, and political aspects that are related to water
policy make it difficult to provide a comprehensive policy
analysis. General equilibrium models of irrigation water
management allow incorporation of both the irrigation sector
and the other sectors in the economy and analysis of
policies affecting each of them and the interaction between
them. In addition to being able to address sector and
household specifications, production factors, time horizon,
pricing policies, and institutions such as water markets,
general equilibrium models allow the analysis of the impact
of water policies on equity and poverty alleviation. The
authors conclude that, although there has been a significant
increase in efforts to analyze water related problems,
analytical and empirical research in the field is still
deficient and more effort is needed to address them.
